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Budget Officer’s analysis of used Australian F-18 deal to be released Thursday

The first Australian F-18 arrives at Cold Lake, Alberta. Canadian Forces photo.

David Pugliese, Ottawa Citizen

Published: February 26, 2019 - 1:52 PM

The Parliamentary Budget Officer will release his report Thursday on the federal government’s purchase of used Australian F-18 fighter jets for the Canadian Forces.

Yves Giroux’s report will be a fiscal analysis of the government’s acquisition of the 25 aircraft.

Eighteen of the Australian F-18 aircraft will eventually be flying for the Canadian Forces, while another seven will be used for testing and spare parts.

The Royal Canadian Air Force are using the jets as interim fighters to boost the capability of the current fleet of CF-18s until a new generation aircraft can be bought.

The Royal Canadian Air Force recently received its first two used Australian fighter jets at 4 Wing Cold Lake in Alberta. The first two aircraft were F/A-18A models, which means they are single seat aircraft. The aircraft were flown to Cold Lake, Alberta, from Nellis, Nevada, where they were participating in Exercise RED FLAG. The aircraft will be employed at 3 Wing Bagotville and 4 Wing Cold Lake, according to the RCAF.

Deliveries of the Australian jets will continue at regular intervals for the next three years, and aircraft will be integrated into the CF-18 fleet as modifications are completed, according to the RCAF. The final aircraft are expected to arrive by the end of 2021.

A second group of planes are expected to arrive later this year.

Canada is paying Australia $90 million for the aircraft. The federal government originally estimated the purchase of the Australian jets would cost around $500 million, but the Department of National Defence’s procurement chief, Pat Finn, said that price reflected every aspect of the associated deal, not just the cost of purchasing the jets. Canada is also acquiring extra spare parts, the Australian jets will have to be outfitted with specific Canadian equipment and software and testing will be needed.

The $500-million project estimate also included $50 million in contingency funds to cover any problems and another $35 million for the salaries of all civilian and military personnel involved over the life of the project. An additional $30 million will be spent on new infrastructure over the years needed to accommodate the aircraft.

Those costs add up to $360 million, Finn said. But DND also plans to upgrade its existing fleet of CF-18s with new communications gear and equipment required to meet regulations to operate in civilian airspace, improvements which the Australian jets will also eventually receive at a cost of around $110 million, an amount that brought the original estimate to nearly $500 million.

The Liberal government had planned to buy 18 new Super Hornet fighter jets from U.S. aerospace giant Boeing to augment the Royal Canadian Air Force’s CF-18s until new aircraft can be purchased in the coming years.

But in 2017 Boeing complained to the U.S. Commerce Department that Canadian subsidies for Quebec-based Bombardier allowed it to sell its C-series civilian passenger aircraft in the U.S. at cut-rate prices. As a result, the administration of U.S. President Donald Trump enacted a tariff of almost 300 per cent against the Bombardier aircraft sold in the U.S. In retaliation, Canada cancelled the deal to buy the 18 Super Hornets, which would have cost more than US$5 billion.

Instead of buying the new Super Hornets, the Liberals decided to acquire the used Australian jets.